Zillow invests $10 million in virtual interior design app Hutch

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Over the last few years, whenever the Zillow Group wanted to grow, the real estate giant went the acquisition route.

Whether it was paying $108 million to acquire digital document company DotLoop, buying Bridge Interactive Group, a creator of broker and multiple listing service back-office software, acquiring Retsly, a Canada-based real estate software startup, or the company’s much-publicized $2.5 billion deal for its former competitor Trulia, Zillow grew via acquisition.

But for the first time, Zillow is investing in a company that it doesn’t plan to acquire, at least not yet.

Zillow was the sole investor in a $10 million Series A round of funding for Hutch Interiors, a virtual interior design app.

According to details provided by Hutch, the company’s app allows users to apply style filters to photos to customize rooms in their home.

Basically, a user uploads a picture of a room in their house or apartment to the app. Then the user can “see their rooms reimagined through distinct design filters such as Malibu Luxe, Scandinavian Summer and Tropic Glam.”

Each of the products shown in the virtual view is selected by Hutch’s design team and purchasable directly through the app.

In a release, Hutch said that it plans to use the $10 million investment from Zillow to  “accelerate product development and growth of the company’s home design app and functionality.”

According to a Zillow spokesperson, this is the first time that Zillow has invested in consumer-facing technology. “At this time, we believe an investment in Hutch will better serve the company and its users as it continues to rapidly grow,” Zillow’s spokesperson said.

As part of the deal, Zillow CEO Spencer Rascoff will joining Hutch’s board of directors.

‘We are very excited to be working with Zillow Group as the company has been empowering home shoppers and renters with innovative technology for more than decade,” Beatrice Fischel-Bock, CEO and co-founder of Hutch said in the release. “Spencer’s extensive knowledge of consumers, technology and real estate make him a natural fit for our board and look forward to his input as we continue to rapidly grow and scale our business.”

Rascoff also provided a window into why Zillow is investing in Hutch.

“A huge hurdle both renters and buyers face is envisioning themselves in a new home,” Rascoff said in the release.

“By investing in Hutch, we are enabling breakthrough innovation that enhances online home shopping and design experiences,” Rascoff continued. “Hutch’s augmented reality technology has the potential to be transformative to the home shopping process and we are excited for the opportunity to help them grow.”

Based on Rascoff’s comments, the likely outcome of this investment isn’t hard to predict.

At some point in the future, Zillow users could use Hutch’s technology to visualize what their furniture might look like in a listing that they’re viewing on Zillow. Or they user could outfit their potential new home with home décor items from Hutch.

Combine this investment and the recent rollout of Zillow’s “Instant Offers” program, through which homeowners looking to sell their home are able to get cash offers on their home from selected investors interested in buying it, all within Zillow’s platform, and Zillow is now another step closer to becoming a true “one-stop shop” for homebuyers and sellers.

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